Mark Dodosh Blog

Parsing through Paul Dolan's state-of-the-team comments

Editor’s Note: The Indians held their annual “What’s New” event at Progressive Field today; for updates on what they showed, check out my Twitter feed.
There was plenty of interesting stuff in Cleveland Indians CEO Paul Dolan's chat with The Plain Dealer's Terry Pluto that ran in Tuesday's paper.
Some of what Dolan said is logical and proven, and yet it's stuff that Indians fans have shown they simply don't want to hear. I've written ad nauseum that in no other business would a company owner be expected to lose money.
People disagree with me, on the basis that pro sports are much different and a community asset. Eh. Parker Hannifin is a community asset, too. As is Progressive. The Cleveland Clinic. MetroHealth. And yet none of those companies operate as fans want the Indians to operate.
Hell, Dan Gilbert operated the Cavaliers like fans want the Dolans to operate the Indians, and he needed home playoff games just to break even! During the LeBron James Era!
Gilbert was willing to lose money. It's been made clear by the Dolans' actions that, for the most part — a caveat for any Indians employee reading that wants to quibble — they're unwilling to deficit spend, or at least in a major way.
Again, fine by me.
But Dolan's response to Pluto's questions about the Tigers, then, were peculiar.
”I understand that makes us look bad,” Dolan said. “I don't understand the foundation of what they are doing ... OK, in the short term, I do understand it, but long term ...”
The foundation of what they're doing is showing a willingness to lose money. Some team owners are, some aren't. The Tigers are. I don't expect Dolan to come right out and say that, but let's not play naïve, OK?
Tigers average ticket prices, according to Team Marketing Report, are $29. The Indians' average ticket price is $19. The Tigers sold 801,000 more tickets than the Indians did last season; that's a $23 million gap in ticket sales. (And yes, that's a rudimentary calculation, of course. Many other variables weigh in.) The Tigers' 2012 payroll projects to be about $60 million above Cleveland's.
Of course, TV money plays a part. Late Tuesday, the Los Angeles Dodgers — the bankrupt Los Angeles Dodgers — sold for $2.15 billion. Obviously, there's no comparing market size, revenues, etc. But that price is based heavily on an anticipated new TV rights deal.
The Tigers make $40 million yearly, according to various reports, as part of a 10-year, $1 billion deal with Fox Sports Detroit that also includes the Pistons and Red Wings.
And there's your $61 million difference in payrolls, and it's one more reason I'm more convinced now than ever that SportsTime Ohio is not long for the future. Dolan also addressed with Pluto the team's network, which has been rumored to be up for sale or targeted by other companies. Dolan said the major portion of STO revenues are from rights fees, but I've been told that STO is at a significant disadvantage in that area because of various factors, including only having one pro sport and deals STO made early on with distributors to get the channel onto local cable providers' offerings.
I've also been told, as I wrote last week when Forbes released its annual business of baseball package, that STO is a break-even proposition at best. If that is true, and I have no reason not to believe the well-placed folks who have told me that, then there's another $40 million they're losing out on to Detroit and teams with even better deals. Could the Indians get $40 million a year from, say, Fox Sports Ohio? Who knows? But whatever they'd get would be better than $0 and help them compete better.